Research has consistently shown that teacher quality is distributed very unevenly among schools to the clear disadvantage of minority students and those from low-income families. Using information on teaching spells in North Carolina, the authors examine the potential for using salary differentials to overcome this pattern. They conclude that salary differentials are a far less effective tool for retaining teachers with strong pre-service qualifications than for retaining other teachers in schools with high proportions of minority students. Consequently, large salary differences would be needed to level the playing field when schools are segregated.